Making tax work for women's rights

Today, March 8th, marks International Women’s Day
and the launch of the
Global Days of Action on Tax Justice for Women’s Rights, coordinated
by the Global Alliance for Tax Justice. News headlines will rightly focus on
the oppression, discrimination and systemic inequalities faced by women, but one
point that is often overlooked is the many ways in which the tax system, like
other policies and structures, offers a transformative tool for redistribution
and financing gender equity.

However, the tax system’s transformative power is consistently
undermined by current tax laws and practices, and these in turn perpetuate and
exacerbate the inequalities faced by women. Large scale tax avoidance and
evasion by multinational companies and wealthy individuals continue to deprive
governments of revenue, which is desperately needed to fund quality
gender-responsive public services for women and girls. Moreover, for many women
– especially those living in poverty – regressive and discriminatory tax
policies represent an added burden.

When tax revenues are progressively collected, they offer a
predictable and sustainable source of income for governments to finance women’s
rights and other priorities of the Sustainable Development Goals, including
eradicating poverty, reducing inequality and addressing climate change. The
good news is that there is growing international awareness of the importance of
tax justice for women’s rights and the many and complex impacts our tax systems
have on women’s equity.

Going, going, gone:
How revenue losses hurt women

Women depend on public services to a greater extent, due to
the inequality they experience, the resulting care burden they bear, as well as
the needs arising from pregnancy and childbirth. When governments fail to
provide adequate care services, this often results in women stepping in to care
for children, older people and their family’s health. Right now, it’s
estimated that women spend 2.5 times more time on unpaid care and
domestic work than men, drastically limiting the time they have available to
pursue education and employment.

We know women
have been hit harder by austerity and a lack of funding is a common
excuse for providing the change that women need worldwide. Yet, our best
estimates suggest that governments worldwide lose a staggering US$500
billion annually due to corporate tax avoidance, with conservative estimates suggesting
$70-120
billion lost from developing countries. When companies avoid tax, they deprive
governments of revenue to fund public services like subsidised childcare,
quality healthcare and education. These are essential for women’s equality.
Taking concrete actions to address these huge revenue losses is a key step
towards tackling inequalities faced by women and girls.

Women’s exclusion
and transparency

At the outset of any discussion of women’s rights, it is essential
to recognise women’s
under-representation in decision-making. The barriers women experience in progressing
to decision-making levels in the public and private sectors mean women are
typically under-represented
as, for example, policy makers and at senior level in large companies.

Women’s limited access to board rooms and high-level offices
also have direct implications for their ability to access important information
about the impacts of our tax systems, since a lot of this information is
secret. This for example includes information about where multinational
corporations are doing business, and how much tax they are paying in each
country where they operate. Currently, European Union is considering a proposal to make
this information public – so-called “public country by country reporting”. This
proposal is vital to ensuring that everybody will get access to information
which we need to assess the fairness of our tax system.

Racing to
the bottom: Shifting the tax burden

Despite the promises to make multinational corporations pay their
share of tax, the world’s governments have become locked in a very costly and
destructive ‘race to the bottom’ on corporate taxation. One government’s
decision to cut taxes for corporations leads others to follow suit, and if the
current trend continues, the
global average corporate tax rate will hit zero per cent in 2052..

While corporations are being asked to pay less, regressive
tax policies like consumption taxes have been used to fill the gap from the
missing corporate tax income. For example, the use of value-added taxes (VAT)
have increased starkly. VAT is considered a regressive tax, because it applies
the same rate to everyone, regardless of their income, wealth or employment
status. This means a wealthy businessman and a poor woman pay the exact same
VAT on products like infant formula. To put this in context, women continue to
face barriers entering the labour-force, and globally are estimated
to earn 77% of what men earn, while paying the same VAT. Many
studies have also raised concerns about the impact of VAT on women-lead
businesses, in the context of poverty (see for example the Global
Tax Justice, ActionAid
and the International
Development Research Centre reports).

Tax justice for
women’s rights

The good news is that there is growing international
awareness of the importance of tax justice for women’s rights and the many and
complex impacts our tax systems have on women’s equity. For example, in January
2019, the European Parliament adopted a new Gender
Equality and Taxation Policies report. It recognises the interconnectedness
of the struggles for gender equity and tax justice, and the need for European
governments and the European Commission to take concrete action to introduce
transparency through public country by country reporting, support tax reform at
the global level, and undertake regular gender audits on all fiscal policies.

Tax is a key building block of societies. It is one of the
most powerful tools we have to reduce the inequality gap between rich and poor
– inside a country and between countries - and between men and women. Equally,
taxes are the most sustainable source of government revenue to pay for the
public services that societies rely on. Governments now need to end put and to
large-scale international tax dodging, introduce transparency and tax justice,
and invest in quality gender-responsive public services and fulfilling women’s
rights.